Oil Wealth Fuels Gaddafi's Drive For Reinvention

TRIPOLI, Libya -- Brother Leader Moammar Gaddafi still exhorts his people to greatness from billboards, banners and murals. But these days a different kind of command is driving Libya's transformation as the newly opened country taps into oil wealth: "izala," Arabic for "raze it to the ground."

Surveyors are spraying the word in red paint up and down Libya's Mediterranean coast. The orange-vested road crews are tagging for demolition the old Libya -- low-rise, stucco Libya, sleepy under decades of Gaddafi's socialist economy and international sanctions.

To rise in its place, Gaddafi's officials say: the increasingly capitalist Libya, with new buildings for the country's new stock exchange. Airports to ferry in and out a dreamed-of annual flow of 30 million oil workers, tourists and other travelers. The world's second-largest port after Singapore. Railways. Highways. Hospitals. Schools. Luxury beachfront hotels.

Libyans and Westerners here cite a statement attributed to Gaddafi: Libya must destroy in order to rebuild.

"I can't believe they're going to do it," one white-haired shopkeeper said this past weekend at his snack shop on the coast road east of the capital, Tripoli. "Izala" was scrawled across the front of his sandstone shop, marking it for bulldozing to clear the way for a highway.

"It's going on all over the country," the shopkeeper said, speaking out of earshot of the government officials who still often trail foreign reporters here. "They're coming up with all these wild schemes, and no one knows if it's going to happen."

The lifting of international penalties and the ensuing exploitation of its oil fields are changing Libya from a stunted pariah state to a courted oil giant. Libya has Africa's largest proven oil reserves; expanded investment would make this nation one of the world's top 10 oil producers, industry experts say.

The country's oil and gas fields stood neglected for decades under sanctions imposed by the United Nations, United States and European Union in response to Gaddafi's alleged sponsorship of terrorism and pursuit of nuclear weapons.

In 1986, President Ronald Reagan called Gaddafi the "mad dog of the Middle East." Days later, following a bombing at a Berlin nightclub frequented by American soldiers, U.S. airstrikes barely missed the Libyan leader.

By 2003, Gaddafi was changing his ways. Many American officials credit the U.S.-led invasion of Iraq for his change of heart; Libyan officials insist that only negotiations and internal reflection prompted Gaddafi to abandon his pursuit of weapons of mass destruction and take other steps demanded by Western nations.

British Prime Minister Tony Blair visited in 2004. In 2006 the United States stopped listing Libya as a state sponsor of terrorism. Blair and French President Nicolas Sarkozy traveled to Libya this year, bringing with them oil and defense contracts. Sarkozy's trip followed Libya's release of five Bulgarian nurses and a Palestinian doctor convicted in a highly disputed case alleging they had infected children with the virus that causes AIDS.

U.S. Secretary of State Condoleezza Rice has said she hopes to visit Libya soon. The State Department has taken two floors of a tony Tripoli hotel for a new embassy, restoring full diplomatic relations for the first time since 1979.